NEW YORK, Sept. 23, 2022 /PRNewswire/ — Under RMI’s leadership, six top lenders to the global steel sector — Citi, Crédit Agricole CIB, ING, Societe Generale, Standard Chartered and UniCredit — today announced the signing of the Sustainable STEEL Principles (SSP), the first climate-aligned finance agreement for lenders to the steel industry.
The SSP are the turn-key solution for measuring and disclosing the 1.5°C alignment of steel lending portfolios. Designed to support the practical achievement of net-zero emissions in the steel industry, they also provide the tools necessary for client engagement and advocacy.
The Principles were carefully designed over the course of a year by a working group facilitated by RMI, led by ING and co-led by Societe Generale, with participation from Citi, Standard Chartered and UniCredit. The resulting framework positions lenders to facilitate the net-zero transition of the steel industry — the largest source of industrial emissions globally. Signatories to the SSP represent a combined bank loan portfolio of approximately $23 billion in lending commitments to the steel sector, for a market share of over 11% of total private sector steel lending, according to RMI research.
The SSP provide a methodology for banks to measure and report the emissions associated with their loan portfolios compared to net-zero emissions pathways. In doing so, the framework informs banks of how emissions-intensive their steel loans are relative to the net-zero pathway needed to stay within our planet’s remaining carbon budget — a metric known as climate alignment.
Steel is used in everything from cars and fridges to buildings and planes. However, because of the sector’s reliance on coal, it contributes 7% of CO2 emissions globally. With demand for steel projected to grow 30% by 2050, emissions are set to rise significantly if we continue with business-as-usual.
Signatories to the Sustainable STEEL Principles commit to the following five principles:
- Standardized assessment – A methodology to measure portfolio emissions
- Transparent reporting – A framework to disclose progress annually
- Enactment – Instructions to obtain credible, high-quality data
- Engagement – Signatories are encouraged to engage clients on net-zero transition plans, and available financial products
- Leadership – Signatories are encouraged to utilize the framework for advocacy, in the interest of the decarbonization of the steel industry
Law firm Allen & Overy provided legal counsel and CRU provided cutting-edge steel sector data. For full announcement, visit: https://rmi.org/press-release/global-banks-sign-sustainable-steel-principles/
For media enquiries, contact Shravan Bhat, Senior Associate, RMI’s Center for Climate-Aligned Finance: [email protected]
SOURCE Rocky Mountain Institute